The National Anti-profiteering Authority (NAA) directed the Director-General of Anti-Profiteering (DGAP) to investigate the profiteering charges against Subway Franchise.
It was alleged that despite the reduction in the rate of GST from 18% to 5% w.e.f. November 15, 2017, the Respondent had not passed on the commensurate benefit of tax-rate reduction as he had increased the base prices of his products.
The Adjudication Authority headed by the Chairman B.N.Sharma observed that as an investigating agency, the DGAP has been conferred with wide-ranging powers under Rules 129 and 132 of the CGST Rules read with Section 171 of the CGST Act, 2017 to summon any relevant record which may be required for conducting an investigation and the DGAP should have exhausted all the options available to him to get the requisite data from the Respondent.
The NAA found that this was a fit case for exercise of all the powers granted under the CGST Act 2017 and the CGST’ Rules 2017 to the DGAP to summon the data/information and any other records for computation of the amount of profiteering accordingly.
The NAA noted that the DGAP has neither taken available appropriate coercive action against the Respondent under Rule 132 of the CGST Rules, 2017 nor the DGAP has initiated prosecution against the Respondent under Section 122 of the CGST Act, 2017. Hence the DGAP has still not exhausted all the legal resources available under the CGST Law to arrive at an evidence-based conclusion in this matter.
Therefore, NAA without going into any merits/other submissions filed by the Respondent at this stage, opined that this case to be a fit case for revisiting the investigation by the DGAP and for computing the amount of profiteering based on the data/records to be submitted by the Respondent and SSIPL, the franchisor.
The Authority directed the Respondent to furnish all the data/information to the DGAP within 30 days of this order under any circumstances, failing which the DGAP shall use all the means, available within the law, to obtain the requisite data/information and complete the investigation and submit his report to this Authority.
Thus, directed the DGAP to reinvestigate the matter as per the provisions of Rule 133(4) of the CGST Rules 2017.
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